A Brief History of Checking

No one is quite sure when the first checks appeared. Some experts think the Romans may have invented the check about 352 B.C. But even if that were true, the idea apparently didn't catch on. According to most history texts, it probably wasn't until the early 1500s, in Holland, that the check first got widespread usage. Amsterdam in the sixteenth century was a major international shipping and trading center. People who had accumulated cash began depositing it with Dutch “cashiers,” for a fee, as a safer alternative to keeping the money at home. Eventually the cashiers agreed to pay their depositors' debts out of the money in each account, based on the depositor's written order or “note” to do so.

The concept of writing and depositing checks as a method of arranging payments soon spread to England and elsewhere, but not without resistance. Many people in the sixteenth and seventeenth centuries still had doubts about trusting their hard-earned money to strangers and little pieces of paper. In the United States, checks are said to have first been used in 1681 when cash-strapped businessmen in Boston mortgaged their land to a “fund,” against which they could write checks.

The first printed checks are traced to 1762 and British banker Lawrence Childs. The world “check” also may have originated in England in the 1700s when serial numbers were placed on these pieces of paper as a way to keep track of, or “check” on, them.

As checks became more widely accepted, bankers discovered they had a big problem: how to collect the money due from so many other banks. At first, each bank sent messengers to the other banks to present checks for collection, but that meant a lot of traveling and a lot of cash being hauled around. The solution to this problem was found in the 1700s, according to banking lore, at a British coffee shop. The story goes that a London bank messenger stopped for coffee and noticed another bank messenger. They got to talking, realized that they each had checks drawn on the other's bank, and decided to exchange them and save each other the extra trip. The practice evolved into a system of check “clearinghouses”—networks of banks that exchange checks with each other—that still is in use. Today banks in the U.S. can present checks to the Federal Reserve System or private clearinghouses for regional and national check collection.